Earnings per share EUR -0.26 (1.22), -121%, of which EUR -0.97 (0.26) per
share relates to items affecting comparability including total effect from Oskarshamn
nuclear units 1 and 2. Earnings per share including the effect from
discontinued operations are EUR 4.66 (3.55)

Distribution business treated as discontinued operations from Q1/2015, consistent
with IFRS 5, divestment completed in June 2015

Fortum's Board proposes a dividend of EUR 1.10 per share

Summary of outlook

Fortum continues to expect the annual electricity demand to grow in the
Nordic countries by approximately 0.5% on average in the coming years

Power and Technology segment's Nordic generation hedges: for 2016,
approximately 50% hedged at approximately EUR 33 per MWh; for 2017,
approximately 20% hedged at approximately EUR 30 per MWh

The operating profit level (EBIT) for the Russia segment, RUB 18.2
billion, is targeted to be reached during 2017-2018. The euro-denominated result
level will be volatile, due to the translation effect

Key financial ratios *

2015

2014

Return on capital employed, %

22.7

19.5

Net debt/EBITDA

-0.5

1.1

Comparable net debt/EBITDA

-1.7

2.3

Comparable net debt/EBITDA without Värme
financing

n/a

2.0

* Key figure
financial ratios are based on total Fortum, including discontinued operations

“Fortum’s
performance from continuing operations in 2015 was not satisfactory. Profitability
declined and remained depressed throughout the year due to the very low
electricity prices mainly driven by extreme hydro conditions and low commodity
prices. The weak market in combination with an increasing cost burden,
especially the nuclear capacity tax increase in Sweden, forced early closures
of nuclear capacity. This led to extensive write-downs that further burdened our
results. Fortum’s total operating profit, however, increased clearly due to the
sale of the Swedish distribution business that completed the divestment of
Distribution started in 2013.

2015
demonstrated again that Finland and Europe are not isolated islands unaffected
by global economic cycles. The rapid decline in commodity prices (coal, oil) and
increase of subsidised renewable production created an urgent need for the
whole utility industry to transform and improve the industry’s competitiveness.

Fortum’s
balance sheet is strong. At the end of 2015, net debt to EBITDA was -0.5 as Fortum was net cash positive by more than EUR 2 billion.
Net debt decreased by
approximately EUR 6.5 billion during 2015 as a result
of the Distribution divestment. A strong balance sheet and good profitability
are important to Fortum – they ensure flexible implementation of our strategy, create
the capability to carry out our investments and provide the readiness to seize
new opportunities as they arise.

In
Russia, the multi-year investment programme is nearing completion with the
commissioning of two units in Chelyabinsk. The first of the two was finalised
in December 2015 and the last unit is planned to be commissioned during the
first quarter of 2016.

Given
the demanding market, I am, however, very pleased with the continued positive
development in Fortum's stakeholder satisfaction last year. According to a survey
the company conducted, Fortum’s reputation has improved and our investments in
sustainability have received recognition. We now have a good base to continue building
on. Our customers are – and will continue to be – our key focus area. As a
result, both our customer base in electricity sales and heat has steadily
increased.

In
2016, my priority in my role as Fortum’s CEO will be to lead the implementation
of our new vision and strategy that we will present in more detail today. In
order to further strengthen Fortum’s position in the utility sector, we will
carefully analyse and seize the opportunities our strong balance sheet enables.
We will also work on an agile, lean and efficient organisation in order to
operate more competitively and flexibly as the forerunner of the industry.

Finally,
I would like to thank our employees for their dedication and willingness to
make Fortum an even better company in the current challenging operating
environment.”

Fortum’s Distribution divestment completed

In June 2015, Fortum completed the divestment of its Swedish electricity
distribution business.

The total consideration was approximately SEK 60.6 billion on a debt-
and cash-free basis, corresponding to approximately EUR 6.4 billion. Fortum booked
a one-time sales gain of approximately EUR 4.3 billion, corresponding to EUR 4.82
per share, in the second-quarter 2015 results.

The transaction concluded the divestment of Fortum's Distribution
business, a process that began in 2013. The total consideration from the divestments
in Finland, Sweden and Norway is approximately EUR 9.3 billion on a debt- and
cash-free basis and approximately EUR 6.2 billion in non-taxable sales gains booked
during 2014 and 2015.

IFRS restatement relating to discontinued operations

After the divestment of
the Swedish distribution business, Fortum has no distribution operations. Therefore,
as of the first-quarter 2015 interim report, the Distribution segment has been
treated as discontinued operations, consistent with IFRS 5 "Non-current
assets held for sale and Discontinued operations". The income statement,
including other comprehensive income, cash flow statement and certain key
ratios has been restated for the 2014 comparative period. In the segment
information, the Distribution segment is reclassified as discontinued
operations.

Financial results
discussed in this financial statements bulletin are for the continuing
operations of Fortum Group.

Financial
results

October–December 2015

In the fourth quarter
of 2015, sales were EUR 964 (1,133) million, the decrease was mainly due to weak
power prices and the Russian rouble. Comparable operating profit totalled EUR 243
(370) million and the reported operating profit totalled EUR 38 (584) million.
Fortum's operating profit for the period was affected by approximately EUR -119
million from impairments and provisions, as well as non-recurring items EUR 1
(238) million, an IFRS accounting treatment (IAS 39) of derivatives mainly used
for hedging Fortum's power production, and nuclear fund adjustments for
continuing operations amounting to EUR -87 (-24) million (Note 4).

Sales by segment

EUR
million

IV/15

IV/14

2015

2014

Power and Technology

440

588

1,722

2,156

Heat, Electricity Sales and Solutions

352

393

1,187

1,332

Russia

266

281

893

1,055

Other

28

15

114

58

Netting of Nord Pool transactions

-97

-121

-336

-422

Eliminations

-26

-24

-122

-91

Total continuing operations

964

1,133

3,459

4,088

Discontinued operations

-

173

274

751

Eliminations

-

-21

-31

-89

Total Fortum

964

1,285

3,702

4,751

Comparable
operating profit by segment

EUR
million

IV/15

IV/14

2015

2014

Power and Technology

142

276

561

877

Heat, Electricity Sales and Solutions

53

49

108

104

Russia

69

59

201

161

Other

-21

-14

-63

-57

Total
continuing operations

243

370

808

1,085

Discontinued operations

-

67

114

266

Total
Fortum

243

436

922

1,351

Operating profit
by segment

EUR
million

IV/15

IV/14

2015

2014

Power and Technology

-65

318

-396

855

Heat, Electricity Sales and Solutions

54

221

105

337

Russia

69

59

203

161

Other

-21

-14

-62

-58

Total continuing operations

38

584

-150

1,296

Discontinued operations

-

66

4,395

2,132

Total Fortum

38

650

4,245

3,428

January–December 2015

In 2015, sales were
EUR 3,459 (4,088) million, the decrease was mainly due to weak power prices and
the Russian rouble. Comparable operating profit totalled EUR 808 (1,085) million
and the reported operating profit totalled EUR -150 (1,296) million. Fortum's
operating profit for the period was affected by EUR -794 million impact from
the early closure of Oskarshamn nuclear units 1 and 2 (O1 and O2) in Sweden
(Note 6), other impairments and provisions EUR -124 (0) million as well as non-recurring
items EUR 22 (305) million, an IFRS accounting treatment (IAS 39) of
derivatives mainly used for hedging Fortum's power production and nuclear fund
adjustments for continuing operations amounting to EUR -62 (-94) million (Note 4).
Total Fortum’s operating profit EUR 4,245 (3,428) million includes the sales
gain from the divestment of the Swedish electricity distribution business,
approximately EUR 4.3 billion (approximately EUR 1.9 billion from Finnish and
Norwegian operations in 2014).

The share of profit
from associates was EUR 20 (146) million, the negative impact came mainly from
the write-down of Oskarshamn nuclear units 1 and 2, in Sweden. The impact on
earnings per share from the early closure of nuclear units O1 and O2 was EUR
-0.82 per share. Fortum Värme represented EUR 47 (67) million, the decrease was
mainly due to the paid compensation for refinancing the interest-bearing loans
from Fortum. The share of profit from Hafslund and TGC-1 are based on the
companies' published third-quarter 2015 interim reports (Note 14).

Taxes for the period
totalled EUR 78 (-143) million. Taxes for the period are positive as
the group is in loss position. This is mainly due to the write-down related to
early closure of nuclear units O1 and O2 units in Sweden. The tax rate
according to the income statement was 25.4% (11.6%). The tax rate, excluding
the impact of the share of profit from associated companies, joint ventures as
well as non-taxable capital gains, was 23.5% (2014: 18.0%) (Note 10).

The profit for the period
for continuing operations was EUR -228 (1,089) million. Earnings per share for
continuing operations were EUR -0.26 (1.22), of which EUR -0.97 (0.26) per
share relates to items affecting comparability, including
total effect related to early
closure of nuclear units O1 and O2. Earnings per share for total Fortum,
including the effect from discontinued operations, were EUR 4.66 (3.55),
including the EUR 4.82 gain from the sale of the Swedish electricity
distribution business. Earnings per share for total Fortum in 2014
were impacted by EUR 2.08 per share from the sale of the Finnish electricity
distribution business (Note 7).

Financial position and
cash flow

Cash flow

In 2015, net cash
from operating activities from continuing operations decreased by EUR 178 million
to EUR 1,228 (1,406) million, mainly due to lower EBITDA. Realised foreign
exchange gains and losses of EUR 292 (352) million were related to the rollover of
foreign exchange contract hedging loans to Fortum's Swedish and Russian
subsidiaries. Total net cash from operating activities including discontinued
operations amounted to EUR 1,381 (1,762) million.

Capital expenditures for continuing operations decreased by EUR 95 million
to EUR 527 (622) million. Net cash from investing activities for total Fortum
was EUR 6,268 (2,816) million, including the impact from discontinued
operations amounting to EUR 6,303 (2,574) million. Cash flow before financing
activities for total Fortum increased by EUR 3,072 million to EUR 7,650 (4,578)
million, including the net impact of discontinued operations of EUR 6,457 (2,930) million.

Fortum paid dividends totalling EUR 1,155 million in April 2015. The net
increase in liquid funds during the period was EUR 5,490 million.

Assets and capital
employed

Total assets increased
by EUR 1,392 million to EUR 22,767 (21,375) million.

Liquid funds
increased by EUR 5,436 million to EUR 8,202 (2,766) million, and property,
plant and equipment decreased by EUR 2,485
million, both arising mainly from the divestment of the Swedish distribution
business. The long-term interest-bearing receivables decreased by EUR 1,268 million
to EUR 773 (2,041) million mainly due to the early closure of Oskarshamn units
1 and 2 in Sweden and repayments by Fortum Värme.At the end of 2015 Fortum did not have any loan
receivables from Fortum Värme.

Capital employed for
total Fortum was EUR 19,870 (17,918) million, an increase of EUR 1,952 million.

Equity

Total equity
attributable to owners of the parent company totalled EUR 13,794 (10,864) million.

The increase in equity attributable to owners
of the parent company totalled EUR 2,930 million and was mainly from the gain
on the divestment of Swedish distribution business of approximately EUR 4.3
billion, partly offset by the dividend payment of EUR -1,155 million for 2014.

Financing

Fortum was net cash
positive at the end of the period as net debt decreased by EUR 6,412 million
during 2015 from net debt EUR 4,217 million to net cash EUR 2,195 million.

At the end of 2015,
the Group’s liquid funds totalled EUR 8,202 (2,766) million. Liquid funds
include cash and bank deposits held by OAO Fortum amounting to EUR 76 (134)
million. In addition to liquid funds, Fortum had access to approximately EUR 2.2
billion of undrawn committed credit facilities (Note 16).

The net financial
expenses were EUR -175 (-210) million of which net interest expenses were
EUR -152 (-165) million. Net financial expenses include compensation from
prepayment of loans by Fortum Värme EUR 37 million and changes in the fair
value of financial instruments of EUR -18 (-5) million.

On 5 June 2015, Standard & Poor's downgraded Fortum’s long-term
rating to BBB+ from A- and affirmed the A-2 short-term rating. The outlook is
stable. The long-term corporate credit rating was removed from CreditWatch,
where it had been placed since 18 March 2015. On 17 November 2015, Fitch Ratings
downgraded Fortum’s long-term Issuer Default Rating (IDR) and senior unsecured
rating to BBB+ from A-, while affirming the short-term IDR at F2 with a stable
outlook.

Key figures

At year-end 2015, net debt to EBITDA was -0.5(1.1) and
comparable net debt to EBITDA -1.7(2.3). At year-end 2015, Fortum was no
longer financing Fortum Värme.

Gearing was -16% (39%) and the
equity-to-assets ratio 61% (51%). Equity per share was EUR 15.53(12.23).
For the year 2015, return on capital employed totalled 22.7% (19.5%).

Market conditions

Nordic countries

According to preliminary statistics,
electricity consumption in the Nordic countries was 103 (104) terawatt-hours (TWh) during the fourth
quarter of 2015. In January-December 2015, it was 381 (378) TWh. The full-year increase was mainly driven
by higher industrial consumption in Sweden and Norway.

At the beginning of 2015, the Nordic water
reservoirs were at 80 TWh, which is 3 TWh below the long-term average and 2 TWh
lower than a year earlier. By the end 2015, reservoirs were at 98 TWh, which is
15 TWh above the long-term average and 18 TWh higher than at the end of 2014. Reservoir
surplus compared to the long-term average increased further during the fourth quarter
due to high precipitation and mild weather, which delayed snow accumulation. Snow
reservoirs were approximately normal at year-end.

In the fourth quarter of 2015, the average
system spot price of electricity in Nord Pool was EUR 21.9 (30.7) per megawatt-hour (MWh). Mild weather
reduced consumption and high water reservoirs put pressure on prices. In Finland,
the average area price was EUR 30.6 (36.4) per
MWh and in Sweden SE3 (Stockholm) EUR 23.0 (31.3) per MWh.

During January–December 2015, the average
system spot price was EUR 21.0 (29.6).
The decline was due to the highest annual inflow ever reported and
correspondingly very high hydro production volumes as well as mild weather and
low commodity prices. In addition, wind
power production increased during the year, impacting spot prices negatively.
The average area price in Finland was EUR 29.7 (36.0) and in Sweden SE3 (Stockholm) EUR 22.0 (31.6).

In Germany the average spot price during the fourth
quarter of 2015 was EUR 33.2 (34.8) per
MWh and during January-December 2015 EUR 31.6 (32.8) per MWh.

The market price of CO2 emission
allowances (EUA) was at approximately EUR 7.1 per tonne at the beginning of the
year and EUR 8.3 at the end of 2015.

Russia

Fortum operates in the Tyumen and
Khanty-Mansiysk area of Western Siberia, where industrial production is
dominated by the oil and gas industries, and in the Chelyabinsk area of the
Urals, which is dominated by the metal industry.

According to preliminary statistics, Russia
consumed 275 (282) TWh
of electricity during the fourth quarter of 2015. The corresponding figure in
Fortum’s operating area in the First price zone (European and Urals part of
Russia) was 211 (214) TWh.
In January-December 2015, Russia consumed 1,007 (1,021) TWh of electricity. The corresponding figure
in Fortum’s operating area in the First price zone was 772 (777) TWh.

In the fourth quarter of 2015, the average
electricity spot price, excluding capacity price, increased by 5% to RUB
(Russian rouble) 1,178 (1,120) per
MWh in the First price zone. In January-December 2015, the average electricity
spot price, excluding capacity price, decreased by 0.8% to RUB 1,154 (1,163) per MWh in
the First price zone.

More detailed information about the market
fundamentals is included in the tables at the end of the report (pages 59-61).

European business environment
and carbon market

Paris Agreement

In December 2015, a global climate agreement for the post-2020 period
was adopted. All countries are obligated to prepare national contributions,
including mitigation, adaptation and financing, to be reviewed every five
years. The long-term goal is to keep the temperature increase well below 2°C
above pre-industrial levels with efforts to limit it to 1.5°C.

The agreement increases long-term stability and predictability,
encourages market-driven actions and reduces the risk of carbon leakage.
Potentially, it can result in an accelerated low-carbon energy transition and new
business opportunities. However, there will be no direct impact on CO2 price
unless the EU decides to increase its 2030 target. The EU Heads of States will discuss the results of
Paris and the possible consequences on EU targets and policies in March 2016.

EU
emissions trading reform

In 2015, the EU
Council formally adopted the European Commission’s proposal to create a reserve
to hold surplus CO2 permits under the EU Emissions Trading System. This means
that the proposed Market Stability Reserve will become operational in January
2019 and will remove 12% of the net surplus each year, as long as it remains
above 833 million tonnes. The EU Environment Council adopted the legislation on
behalf of the wider EU Council.

EU power market
development

The public consultation on the new EU
electricity market design was closed in 2015. Although the aim of the
consultation is to collect input from different stakeholders, the European
Commission has already stated quite clearly that its preference is to focus on
further development of the current energy-only market design rather than going
towards capacity markets. In particular, fixed capacity payments are not
favoured because of their highly distortive nature. The Commission will put
forward proposals for a comprehensive revision of the energy market-related
legislation in the autumn 2016.

State of the Energy
Union Report

In November 2015, the
European Commission published the first edition of the annual “State of the EU
Energy Union” report. It included reports on each member states’ progress in
implementing the EU energy and climate targets, and the key principles for the
governance system to ensure implementation of the Energy Union in a transparent
and predictable way. The report also underlines the EU’s ambition to continue
the EU leadership in the transition to a low-carbon economy after COP21, and to
ensure that the transition is socially fair and consumer-centred. Continuing
geopolitical challenges are also noted in the report.

Circular Economy Package

In December 2015, the EU Commission also proposed
a Circular Economy package aiming at better resource efficiency and high-quality
reuse of products and recycling of waste. The proposal includes amendments to
several waste-related directives and ambitious EU targets for reuse and
recycling of all waste streams. The Commission is proposing a ban on the landfilling
of separately collected waste and limiting the share of landfilled municipal
waste to a maximum of 10% by 2030.

When waste cannot be prevented or recycled, using
it for energy is preferred to landfilling. ‘Waste to energy’ can therefore play
a bigger role in the EU energy and climate policy. The Commission will examine
how the energy potential can best be exploited and will adopt a waste-to-energy
initiative in the framework of the Energy Union during 2016.

Outlook

Key drivers and risks

Fortum's financial results are
exposed to a number of economic, strategic, political, financial and
operational risks. One of the key factors influencing Fortum's business
performance is the wholesale price of electricity in the Nordic region. The key
drivers behind the wholesale price development in the Nordic region are the
supply-demand balance, the prices of fuel and CO2 emissions
allowances, as well as the hydrological situation. The completion of Fortum’s
investment programme in Russia is also a key driver in the company’s result
growth, due to the increase in production volumes and CSA payments.

The continued global and European uncertainty
has kept the outlook for economic growth unpredictable. The overall economic uncertainty impacts commodity and
CO2 emissions allowance prices, and this could maintain downward pressure on the Nordic wholesale price of
electricity. In Fortum's Russian business, the key factors are economic growth,
the rouble exchange rate, the regulation around the heat business, and further
development of electricity and capacity markets. Operational risks related to
the investment projects in the
current investment programme are still valid. In all regions, fuel prices and
power plant availability also impact profitability. In addition, increased volatility in exchange rates due to financial
turbulence could have both translation and transaction effects on Fortum's
financials, especially through the Russian rouble and Swedish krona. In the
Nordic countries, also the regulatory and fiscal environment for the energy
sector has added risks for utility companies.

Nordic market

Despite macroeconomic uncertainty,
electricity is expected to continue to gain a higher share of the total energy
consumption.Electricity demand is expected to grow in the Nordic
countries by approximately 0.5% on average in the coming years.

During January-December 2015, the price of
the European Union emissions allowances appreciated, whereas oil and coal
prices declined. The price of electricity for the upcoming twelve months
declined in the Nordic area as well as in Germany.

In late-January 2016 the quotation for coal
(ICE Rotterdam) for the rest of 2016 was around USD 42 per tonne, and for CO2
emission allowances for 2016 about EUR 6 per tonne. The Nordic system electricity
forward price in Nasdaq Commodities for the rest of 2016 was around EUR 19 per
MWh and for 2017 around EUR 18 per MWh. In Germany, the electricity forward
price for the rest of 2016 was around EUR 25 per MWh and for 2017 around EUR 24
per MWh. Nordic water reservoirs were about 9 TWh above the long-term average
and 8 TWh above the corresponding level of 2015.

Power
and Technology

The Power and Technology segment’s (achieved)
Nordic power price typically depends on such factors as hedge ratios, hedge
prices, spot prices, availability and utilisation of Fortum's flexible
production portfolio and currency fluctuations. Excluding the potential effects
from changes in the power generation mix, a 1 EUR/MWh change in the Power and
Technology segment’s Nordic power sales (achieved) price will result in an
approximately EUR 45 million change in Fortum's annual comparable operating
profit. In addition, the comparable
operating profit of the Power and Technology segment will be affected by the
possible thermal power generation volumes and its profits.

As a result of the nuclear stress tests
in the EU, the Swedish nuclear safety authority (SSM) has decided to propose
new regulations for Swedish nuclear reactors. The process is ongoing. Fortum emphasises
that maintaining a high level of nuclear safety is the highest priority, but considers
EU-level harmonisation of nuclear safety requirements to be of utmost
importance.

In 2015, the Swedish Government increased the
nuclear waste fund fee for the period 2015-2017 from approximately 0.022 to
approximately 0.04 SEK/kWh. The estimated impact on Fortum is approximately EUR
25 million annually. The process to review the Swedish nuclear waste fees is
done in a three-year cycle. However, as a result of the decision on early
closure of nuclear power plants, the Swedish Radiation Safety Authority, SSM,
recalculated the waste fees for the Oskarshamn and Ringhals power plants. The new
assessment needs the approval of the Swedish Government.

In addition, the Swedish Parliament decided
to approve the proposed tax increase of 17% on installed nuclear capacity. The
tax was implemented as of 1 August 2015. The estimated impact on Fortum is approximately
EUR 15 million in 2016, albeit corporate tax-deductible. The future of the
nuclear tax is subject to active political debate in Sweden.

In October 2015, OKG AB's extraordinary
shareholders' meeting decided on the closure of Oskarshamn nuclear power plant
units 1 and 2 in Sweden. For unit 1, it means that the unit will be taken out
of operation and transferred into service mode after the applied environmental
permit has been received, approximately during 2017-2019. For unit 2, which has
been out of operation since June 2013 due to an extensive safety modernisation,
it means that the unit will not be put back into operation. The closing process
for both units is estimated to take several years.

In
August 2015, Fortum decided to participate in the Fennovoima nuclear power
project in Finland with a 6.6%-share and on the same terms and conditions as
the other Finnish companies currently participating in the project.
Participation will be carried out through Voimaosakeyhtiö SF.

Russia

The Russia segment's new capacity generation built
after 2007 under the Russian Government's capacity supply agreement (CSA) is a
key driver for earnings growth in Russia, as it is expected to bring income
from new volumes sold and also to receive considerably higher capacity payments
than the old capacity. It receives guaranteed capacity payments currently for a
period of 10 years. A draft regulation related to the time frame (in the future
10 or 15 years) regarding the calculation has been submitted for review to the
federal executive authorities, and a decision is expected during first half of
2016. Prices for capacity under CSA are defined in order to ensure a sufficient
return on investments. The received capacity payment will vary depending on the
age, location, size and type of the plants as well as on seasonality and
availability. The return on the
new capacity is guaranteed, as regulated in the CSA. CSA payments can vary
somewhat annually because they are linked to Russian Government long-term bonds
with 8 to 10 years maturity. In addition, the
regulator will review the earnings from the electricity-only market three years
and six years after the commissioning of a unit and could revise the CSA
payments accordingly.

In February 2016, the
System Administrator of the wholesale market is planning to publish data on the
weighted average cost of capital (WACC) and the consumer price index (CPI) for
2015, which is used to calculate the capacity price on CSA in 2016.

The value of the remaining part of Fortum's
investment programme, calculated at the exchange rates prevailing at the end of
December 2015, is estimated to be approximately EUR 100 million, as of January 2016.

According to the new
rules approved by the Russian Government in 2015, the competitive
capacity selection for generation built prior to 2008 (CCS, without capacity
supply agreements) takes place annually. At the end of 2015, the CCS for 2016
and the long-term CCS for 2017-2019 were held. The majority of Fortum’s plants
were selected. The volume of Fortum’s installed capacity not selected in the
auction totalled 195 MW for which Fortum has obtained forced mode status, i.e. it
will receive payments for the capacity. In 2016, the CCS for year 2020 will
take place.

The targeted
operating profit (EBIT) level of RUB 18.2 billion in the Russia segment is
targeted to be reached during 2017-2018. The segment’s profits are impacted by
changes in power demand, gas prices and other regulatory development. The
economic sanctions, currency crisis, oil price and the surge in inflation have
impacted overall demand. As a result, gas prices and electricity prices have not
developed favourably as expected. Previously, the run-rate operating profit level (EBIT) was targeted to be reached
during 2015 after finalising the investment programme.

The euro-denominated result
level will be volatile due to the translation effect. The income statements of
non-euro subsidiaries are translated into the Group reporting currency using
the average exchange rates. The Russia segment's result is also impacted
by seasonal volatility caused by the nature of the heat business, with the
first and last quarter being clearly the strongest.

In 2014, the new heat
market model roadmap proposed by the Ministry of Energy was approved by the
Russian Government; if implemented the reform should give heat market
liberalisation by 2020 or, in some specific areas, by 2023.

As forecasted by the Russian Ministry of
Economic Development, Russian annual average gas price growth is estimated to be
4.9% in 2016.

Restructuring of TGC-1 according to strategy in Russia

In December 2014,
Fortum, Gazprom Energoholding LLC and Rosatom State Corporation signed a
protocol to start a restructuring process of the ownership of TGC-1 in Russia. The
discussions have not yet come to a conclusion. It is not possible to estimate
the timetable.

Capital expenditure and
divestments

Fortum currently expects its capital
expenditure for its continuing operations in 2016 to be approximately EUR 650
million. The annual maintenance capital expenditure is estimated to be about
EUR 300-350 million in 2016, below the level of depreciation.

Taxation

The effective corporate income tax rate for
Fortum in 2016 is estimated to be 19–21%, excluding the impact of the share of
profits of associated companies and joint ventures, non-taxable capital gains
and non-recurring items.

In August 2014, the Finnish Board of
Adjustment of the Large Taxpayers’ Office approved Fortum Corporation's appeal of
the income tax assessment imposed on Fortum for the year 2007 in December 2013.
The Tax Recipients’ Legal Services Unit appealed the matter (Note 23). In
December 2014, Fortum received a non-taxation decision regarding its financing
companies for the remaining years 2008−2011,
based on the same audit. This is in line with the Supreme Administrative Court’s
(SAC) precedent decision. The Tax Recipients' Legal Services Unit has appealed
the decisions in February 2015, and the cases for years 2008−2011 are now pending the Board of
Adjustment of the Large Taxpayers' Office decision. In line with the 2007 case,
Fortum considers the claims unjustifiable.

In June, the Swedish Parliament approved the 17%
increase on the tax on installed nuclear capacity, re-proposed by the Swedish Government.
The tax was implemented as of 1 August 2015. The estimated impact on Fortum is
approximately EUR 15 million in 2016, albeit corporate tax-deductible.

Hedging

At the end of December
2015, approximately 50% of Power and Technology's estimated Nordic power sales
volume was hedged at approximately EUR 33 per MWh for the year 2016. The
corresponding figures for the 2017 calendar year were approximately 20% at
approximately EUR 30 per MWh.

The reported hedge
ratios may vary significantly, depending on Fortum's actions on the electricity
derivatives markets. Hedges are mainly financial contracts, most of them Nasdaq
Commodities forwards.

Dividend distribution
proposal

The
distributable funds of Fortum Oyj as at 31 December 2015 amounted to EUR 5,417,422,951.23 including the profit of the period of EUR 1,133,611,072.83.
After the end of the financial period there have been no material changes in
the financial position of the Company.

The Board
of Directors proposes to the Annual General Meeting that a dividend of EUR 1.10
per share be paid for 2015.

Based on
the number of registered shares as of 2 February 2016 the total amount of
dividend proposed to be paid is EUR 977,203,749.50.
The Board of Directors proposes that the remaining part of the profit be
retained in shareholders’ equity.

Annual General
Meeting 2016

Fortum's Annual General Meeting is planned to
take place at 14:00 on Tuesday, 5 April 2016, at the Finlandia Hall,
Mannerheimintie 13, in Helsinki, Finland.

The Board of Directors has approved Fortum's
2015 financial statements and Fortum's auditors issued their unqualified audit
report for 2015 on 2 February 2016. The financial statements bulletin has been
prepared in accordance with International Accounting Standard (IAS) 34, Interim
Financial Reporting, as adopted by the EU.

Reporting, AGM, and Capital Markets Day in 2016:

Fortum’s Financial statements and the
Operating and financial review for 2015 will be published during week 10 at the
latest.

Fortum will publish three interim reports in 2016:
- January-March on 28 April 2016 at approximately 9:00 a.m. EEST
- January-June on 20 July 2016 at approximately 9:00 a.m. EEST
- January-September on 25 October 2016 at approximately 9:00 a.m. EEST

Fortum's Annual General Meeting is planned to
take place on 5 April 2016 and the possible dividend related dates planned for
2016 are:
- Ex-dividend date 6 April 2016
- Record date for dividend payment 7 April 2016
- Dividend payment date 14 April 2016

Fortum's Capital Markets Day is planned to
take place on 16 November in Helsinki.

Distribution:

Nasdaq Helsinki

Key media

www.fortum.com

More information, including detailed
quarterly information, is available on Fortum’s website at www.fortum.com/investors.